Switching to the Satoshi standard and Lightning Network connectivity makes Bitcoin more tangible and easy to use. AAX has made the first move in the crypto space, already providing BTC to SAT balance conversion with a separate SAT-USDT market with a minimum trade volume of 0.1 USD, launching on August 25.
AAX believes that the adoption of SAT as a unit of measurement is an important and long-overdue process for the cryptocurrency community since the new standard contributes to the spread of Bitcoin and helps new people, especially those from unbanked countries and regions with a lower level of cryptocurrency awareness, make their first purchase into this new form of sound money. Mass adoption should not make the blockchain space look like the classical financial market, as it was never meant to be so.
The Bitcoin community has been requesting such an upgrade for a long time, with big players supporting the new standard. In May, Mike Novogratz, tagging Coinbase, Kraken and FTX, called on crypto exchanges to switch to Satoshis, referring to the growing number of people saying the high price of Bitcoin stops them from buying it:
“It is time to switch to Satoshis. Too many people telling me that $58,000 $BTC is too expensive. Which exchange will be first to quote in SATS?”
Following AAX’s announcement to heed Novogratz’ call, one prominent Bitcoiner and author of “21 lessons: what I’ve learned from falling down the Bitcoin rabbit hole” pointed out that the discussion had been going on for a few years already.
Apart from hints by some exchanges such as OKCoin, it was Bitfinex who was next to make a significant move, announcing:
Switching from BTC-USD to SAT-USD will allow people to be far less hesitant when considering the transition to using Bitcoin. Unit price bias is the biggest problem that has been underestimated for years as an incredibly powerful barrier, and it significantly affects both the average retail investor and new user.
“We are confident that this is the beginning of an important trend, and we are delighted to be at the origins of a new on-exchange metric system. I urge crypto exchanges and payment systems to pay attention to popularize the new standard as soon as possible, as this is the only real way we counter the idea that the Bitcoin ship has sailed. It’s only for the rich”, Toya Zhang, the Deputy COO of AAX, added on the matter.
In addition, an increase in the availability and ease of use of BTC is needed for its further popularization and adoption as a means of payment. However, with its price growth, the situation is developing in the opposite direction since an expensive Bitcoin is less practical for regular payments for everyday goods and services.
As the industry matures, it is harder to gain access to BTC for the unbanked and generate organic demand. Commissions may cost more than the amount the less well-off can trade.
Furthermore, as seen in recent months, meme coins such as DOGE and SHIB are perceived as cheaper than Bitcoin and, consequently, those who might need it most turn to hype money, unsound money, or riskier investments.
The widespread introduction of SATS as a unit can correct the situation, as it is more convenient to carry out calculations. For example, a cup of coffee costs 10,000 SAT or 0.0001BTC. This is also a good marketing ploy for BTC, as users will now be buying 212,000 SAT, not 0.00212 BTC for $100. Apart from such practical and psychological arguments, given that there can only ever be 21 million Bitcoin, most of its users will never be able to hold a full coin. This means that for the majority of Bitcoin holders, SATS will be the reality.
“Of course, in addition to this market and balance switch, we also understand the need to expand the Lighting Network to simplify deposits and withdrawals and bring down associated fees, but AAX is taking the first step in this direction today — offering to buy SATS of 10 cents or more without commission,” as Toya Zhang concluded.
Due to the smaller trade size, market makers on AAX will need to deploy alternative hedging techniques. Although small, within larger BTC movements, this local market for SATS can be expected to chart its own unique price fluctuations. Therefore, to optimally protect smallholders, any order above 50,000 SATS users shall be directed to the main Bitcoin market.
The transition to a simplified standard is part of the AAX initiative to make onboarding easier for new crypto users. On August 5, the exchange cancelled commissions for all spot pairs. As a result, users will be able to trade in the SAT-USD pair for free as well. The first trades in the SAT-USDT pair on AAX will be possible with a minimum order of $0.10 (214 SAT) and a maximum order of 50,000 SAT ($23) from the 25th of August.
